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FAQs every adviser needs to know about specialist lending

Southern Cross Partners is a specialist lender. This means we come in when your clients’ loans don’t quite fit a traditional bank.  

Specialist lending can be tricky to get your head around, and we often hear similar questions from our adviser community. We’ve pulled together this guide of frequently asked adviser questions to help you understand a bit more about what we offer.  

What is specialist lending and when is it right to use? 

Specialist lending is for those situations that need special attention. Specialist lenders, such as SCP, come in when banks won’t lend on a loan, even if the loan makes complete sense. Specialist lenders are also known as non-bank lenders, and the fact we aren’t banks is why it works. 

The non-bank lending industry plays a small yet integral role in the property finance ecosystem. Southern Cross Partners alone helps hundreds of New Zealanders reach their property goals each year.  

Our focus is on short-term, flexible lending solutions that fit the needs of the borrowers. We are the financial bridge, allowing the borrower to either return to a traditional bank with a standard extended loan term, or move on to their next project.

What does Southern Cross Partners do?  

Southern Cross Partners is a specialist peer-to-peer lender. We provide loans to New Zealanders and allow other New Zealanders to invest in these loans. These two sides of the business work together to help Kiwis achieve financial freedom through specialist lending.  

We start by working with our adviser community to secure short-term specialist loans for your borrower. After we’ve paid out that loan from our own funds, we transition the value to the investor side of the business. From there, Kiwis can invest in loans and earn interest on their investment as the borrower repays.  

How does Southern Cross Partners pay commission?  

Simply advise us the fee you have agreed to charge the borrower, and this is added to the loan amount, then paid in full upon drawdown of the loan. There are no clawbacks.

What is a non-regulated loan? 

All the loans we lend on are classed as 'non-regulated' meaning they do not fit under the regulations set under the Credit Contracts and Consumer Finance Act 2003 (CCCFA). Loans that must fit within these regulations are mostly loans in personal names and for personal use.  A loan for an owner occupied property is a good example of a CCCFA loan. SCP is not bound by the same regulations as banks. We choose only to lend on non-regulated loans that do not fit under the CCCCFA rules. Lending in the name of a trust, company or for business purposes etc are good examples of non-regulated loans. 

Why does a loan application need a clear exit strategy? 

We’re all about getting people get from A to B through short term loans using property. Understanding how a borrower will repay their loan with us and how they’ll be better off is what we call a clear exit. 

A borrower can exit a loan in many ways, such as payment from funds derived from other sources, the sale of the security property or other assets or a refinance to another lender. This is why our application process always starts with a conversation about the purpose of a loan and what the borrower’s goals are.  

Got  loan that you are not sure where it fits? We'd love to hear from you. So, if have any questions, please don’t hesitate to get in touch with one of our BDM’s, or you can reach us on 09 535 2239 or loans@scpartners.co.nz